₦airaland Forum

When this news broke on Nairaland front page. I simply made a cheap sarcastic remark about the risk and the greed involved but some people thought I was doing so because I hate dangote's progress.

Some were hopeful it will solve the problem with NUPENG.

I guess most people doesn't really understand this sector.

Let me start with NUPENG. NUPENG houses a union of truckers that are attached to big depots, filling station and maybe refinery as in dangote's case. All over the world truck operators belong to union and their union is among the strongest in the world. These union exist in about 150 countries and theirs also international union of truckers.

Why is this union important?

I once managed a petrol station in port Harcourt.

We had a very honest truck driver but for some reason, the owner of the filling station who is based in UK doesn't just trust any body. So once we finished selling each truck load of 40,000 liters within an average of 5 days we'll do both internal and external audit of the sales to ensure we were getting the value for our money.

So a times when he brings product and there's a dip measurements before he offloads in the underground tanks, it will either show the product is complete or short by 50L.

After sales on many cases we have extra 100L from sales showing the initial dip record from tanker the day it was bought doesn't show the correct measurements.

My boss wasn't having this. He will wail about how other filling station doesn't have such issues. In my defense I usually tell him let's wait and finish sales and check but he fills the extra we have should be more.

Meanwhile other stations around us usually report shortages at the end of sales.

Like play he decided he wasn't going to pay the driver. So for two months he owed him. When the driver protested vehemently, he sacked him.

I was furious infact I had to drop cos he accused me too of being a party to the non existent crime. I had to resign.

The saving grace of the driver was that he was a union member.

He reported the matter to the union.

The union tried reaching the owner, he was acting untouchable, they simply activated a sanction on the filling station. Circular went round, any truck from the filling station is not allowed in any depot across port Harcourt to load. If he uses a different truck they have agent that monitors the station for activities.

Their annoyance was how the man responded when they called him for settlement. The agreement was, They will supervisor the truck loading together with anybody the man wishes to send as escort. When they get to the station and takes a dip, if the dip gives higher than what it always gave they'll take up the matter with the driver and arrest him for theft but if it gives the usual figure the owner will pay him with one month up front.

The owner of the station after several attempts to snub them was frustrated as he wasn't allowed to load product again in the depots.

So the owner agreed. They loaded again they got to the station and took the dip under the supervision of the Union members, as usual the result was same. Meaning the Driver has been truthful all the while.

The union people now fined the filling station for maltreatment and disrespect.

The boss paid to the latter. In the end the driver went home happy and within two weeks secured another truck as a driver.

Now imagine what would have become of the driver.

The Union is responsible for due process in loading depots. If you remove them what you will get is chaos. There's a reason all over the world truckers belongs to union.
Their jobs are so important that they have to be protected.

Just like ASU, Doctors, Labour Union, NUPENG is very important. And they're the only union that doesn't get benefits from the government. They're on their own.

The problem with dangote is that he doesn't want his drivers to join the union. That's evil. He wants to remove their protection. That's why they striked. His drivers absolutely wants to join union.

So how did the union do it? They'll simply shut down all the depots to put pressure on dangote. If there is scarcity and hands starts pointing on dangote he will have to bend quickly. The union can block every entrance into his refinery and all other trucks that belongs to the union will not load product.

The Union exist for the truckers welfare if you remove their welfare the entire supply chain will collapse.

Now dangote wants to avoid buyers coming to his facility to load by bringing fictitious licensing and registration tactics and instead offering free delivery. This is to drive union out of his facility.

But that's not just the plot. If he goes along with it, these are the effects:

Market monopoly

Over reliant on dangote fuel

Long term set backs

Easy high increment of the product

Let me explain;

No body buying and loading from dangote refinery will be able to compete with those on free delivery. Cost will differ. This will make everyone want free delivery.

The importing marketers cannot compete with this. Major marketers that imports operates depots so when dangote sells at prices far below what they're importing and also willing to drop it at your doorstep free of charge, you'll be forced to downsize your business. And they can't buy from dangote cos he's selling to retail filling stations.

This will bring over reliant on the part of retailers on dangote.

On the long run when the wear and tears of evolving government system starts impacting, dangote can wake up one morning and shut down werey.. everybody go cry tire.

When he has beating down major competitors he will simply jack his price up as he pleases. No other competitor. Las las instead of dealing with multiple marketers and be safe cos if one doesn't have, another will we will be dealing with only one man. What we thought we thought we were going out from is where we finally arrived.

At last we are all at the mercy of dangote

The solution is to create a balanced trade system and protect every critical players involved including the final consumers.

Stop crying foul where there shouldn't have been one

Op, I completely understand your position and I see what you are seeing.

The ultimate interest of Dangote Refinery is to monopolize the distribution network of fuel in Nigeria. That will give Dangote Refinery an unfair advantage over other sellers or refineries.

Psalmistproject:
When this news broke on Nairaland front page. I simply made a cheap sarcastic remark about the risk and the greed involved but some people thought I was doing so because I hate dangote's progress.

Some were hopeful it will solve the problem with NUPENG.

I guess most people doesn't really understand this sector.

Let me start with NUPENG. NUPENG houses a union of truckers that are attached to big depots, filling station and maybe refinery as in dangote's case. All over the world truck operators belong to union and their union is among the strongest in the world. These union exist in about 150 countries and theirs also international union of truckers.

Why is this union important?

I once managed a petrol station in port Harcourt.

We had a very honest truck driver but for some reason, the owner of the filling station who is based in UK doesn't just trust any body. So once we finished selling each truck load of 40,000 liters within an average of 5 days we'll do both internal and external audit of the sales to ensure we were getting the value for our money.

So a times when he brings product and there's a dip measurements before he offloads in the underground tanks, it will either show the product is complete or short by 50L.

After sales on many cases we have extra 100L from sales showing the initial dip record from tanker the day it was bought doesn't show the correct measurements.

My boss wasn't having this. He will wail about how other filling station doesn't have such issues. In my defense I usually tell him let's wait and finish sales and check but he fills the extra we have should be more.

Meanwhile other stations around us usually report shortages at the end of sales.

Like play he decided he wasn't going to pay the driver. So for two months he owed him. When the driver protested vehemently, he sacked him.

I was furious infact I had to drop cos he accused me too of being a party to the non existent crime. I had to resign.

The saving grace of the driver was that he was a union member.

He reported the matter to the union.

The union tried reaching the owner, he was acting untouchable, they simply activated a sanction on the filling station. Circular went round, any truck from the filling station is not allowed in any depot across port Harcourt to load. If he uses a different truck they have agent that monitors the station for activities.

Their annoyance was how the man responded when they called him for settlement. The agreement was, They will supervisor the truck loading together with anybody the man wishes to send as escort. When they get to the station and takes a dip, if the dip gives higher than what it always gave they'll take up the matter with the driver and arrest him for theft but if it gives the usual figure the owner will pay him with one month up front.

The owner of the station after several attempts to snub them was frustrated as he wasn't allowed to load product again in the depots.

So the owner agreed. They loaded again they got to the station and took the dip under the supervision of the Union members, as usual the result was same. Meaning the Driver has been truthful all the while.

The union people now fined the filling station for maltreatment and disrespect.

The boss paid to the latter. In the end the driver went home happy and within two weeks secured another truck as a driver.

Now imagine what would have become of the driver.

The Union is responsible for due process in loading depots. If you remove them what you will get is chaos. There's a reason all over the world truckers belongs to union.
Their jobs are so important that they have to be protected.

Just like ASU, Doctors, Labour Union, NUPENG is very important. And they're the only union that doesn't get benefits from the government. They're on their own.

The problem with dangote is that he doesn't want his drivers to join the union. That's evil. He wants to remove their protection. That's why they striked. His drivers absolutely wants to join union.

So how did the union do it? They'll simply shut down all the depots to put pressure on dangote. If there is scarcity and hands starts pointing on dangote he will have to bend quickly. The union can block every entrance into his refinery and all other trucks that belongs to the union will not load product.

The Union exist for the truckers welfare if you remove their welfare the entire supply chain will collapse.

Now dangote wants to avoid buyers coming to his facility to load by bringing fictitious licensing and registration tactics and instead offering free delivery. This is to drive union out of his facility.

But that's not just the plot. If he goes along with it, these are the effects:

Market monopoly

Over reliant on dangote fuel

Long term set backs

Easy high increment of the product

Let me explain;

No body buying and loading from dangote refinery will be able to compete with those on free delivery. Cost will differ. This will make everyone want free delivery.

The importing marketers cannot compete with this. Major marketers that imports operates depots so when dangote sells at prices far below what they're importing and also willing to drop it at your doorstep free of charge, you'll be forced to downsize your business. And they can't buy from dangote cos he's selling to retail filling stations.

This will bring over reliant on the part of retailers on dangote.

On the long run when the wear and tears of evolving government system starts impacting, dangote can wake up one morning and shut down werey.. everybody go cry tire.

When he has beating down major competitors he will simply jack his price up as he pleases. No other competitor. Las las instead of dealing with multiple marketers and be safe cos if one doesn't have, another will we will be dealing with only one man. What we thought we thought we were going out from is where we finally arrived.

At last we are all at the mercy of dangote

The solution is to create a balanced trade system and protect every critical players involved including the final consumers.

Chief, please advise those major importers to come together and build their own refinery in the country too so they can break his monopoly.

Secondly, must all truckers join only NUPENG? Can’t there be other unions different from NUPENG; that also defend truckers interests?

What role did NUPENG play in these moribund NNPC refineries all these years and they never for one day come out to cry out about what is going on there instead you guys went against selling of the refineries because your greed and corruption.

NUPENG is fighting a selfish battle here; someone is unilaterally changing the oil and gas sector for the better and you all are ganging against him.

Wallade:
Op, I completely understand your position and I see what you are seeing.

The ultimate interest of Dangote Refinery is to monopolize the distribution network of fuel in Nigeria. That will give Dangote Refinery an unfair advantage over other sellers or refineries.

The word concept of "monopoly" in dangote fuel distribution is an overstretched imagination of the cabals in the upstream industry.
It's as good as saying Transport companies like Chisco, GUO or GIG would monopolize transportation business system in Nigeria.
Dangote has money, if NUPENG feels threatened and they truly care for the welfare of Nigeria, let them form a coalition and put their resources together and match Dangote financial power bundle for bundle.

Jokay07:
The word concept of "monopoly" in dangote fuel distribution is an overstretched imagination of the cabals in the upstream industry.
It's as good as saying Transport companies like Chisco, GUO or GIG would monopolize transportation business system in Nigeria.
Dangote has money, if NUPENG feels threatened and they truly care for the welfare of Nigeria, let them form a coalition and put their resources together and match Dangote financial power bundle for bundle.

When you want to comment on such issues, do some research so your comments can be informative and understandable.

In the passenger transportation industry in Nigeria, Chisco, GUO or GIG are actually running a monopolistic cartel. For the business owners in any industry, they are capitalists and monopoly has a huge advantage for them.

However, the qualities of free market, if and only if it exists, is free entry and exit and no monopoly. In reality, you should know that there is no market in the world that completely meets those qualities.

Again, NUPENG is not a petroleum products producer, marketer or business. NUPENG is a pressure group; association of staff of organizations that are operating in the petroleum industry in Nigeria. They ultimately protect the welfare, rights and remuneration of their members. Hence, they can't be in business of refinery of petroleum products.

Dangote conglomerates thrives under monopolies.

Dangote Refinery should not prevent staff from unionism. However good the intention of Dangote Refinery is for the staff, the refinery will still utilize the lack of unionism to take undue advantage of the staff.

challoxxx:
Chief, please advise those major importers to come together and build their own refinery in the country too so they can break his monopoly.

Secondly, must all truckers join only NUPENG? Can’t there be other unions different from NUPENG; that also defend truckers interests?

What role did NUPENG play in these moribund NNPC refineries all these years and they never for one day come out to cry out about what is going on there instead you guys went against selling of the refineries because your greed and corruption.

NUPENG is fighting a selfish battle here; someone is unilaterally changing the oil and gas sector for the better and you all are ganging against him.

Oga, the refinery that Dangote built was not financed by him alone, CBN gabe him dollar discount and NNPC also have their share in it. Unionisim has been in existence for a long period of time and just because the man is capitalist, he will never accept anything unionisim be it NUPENG or others.
The reality now is that our useless govt has failed us leaving us to the mercy of the monopolist Dangote.
Nigerians don't learn just because of free delivery, everybody is singing praises of him.
Why can't he bring down the price of cement after all all the materials are all locally made. I weep for the ignorant Nigerians

I don't know any owner of a petrol station that will not like to buy at a cheaper price.



Monopoly will exist because Dangote is taking the risk out of hundreds of millions of Nigerians.

BUA refinery will be ready in few years.

challoxxx:
Chief, please advise those major importers to come together and build their own refinery in the country too so they can break his monopoly.

Secondly, must all truckers join only NUPENG? Can’t there be other unions different from NUPENG; that also defend truckers interests?

What role did NUPENG play in these moribund NNPC refineries all these years and they never for one day come out to cry out about what is going on there instead you guys went against selling of the refineries because your greed and corruption.

NUPENG is fighting a selfish battle here; someone is unilaterally changing the oil and gas sector for the better and you all are ganging against him.

Your advice to major importers "to come together and build their own refinery in the country too" is very plausible and sound.

Yes, there are other unions in the petroleum industry but the strongest and prevalent unions are NUPENG and PENGASSON. You can ask anyone in that industry. So yes, it is expected that all truckers must join strong unions, like NUPENG, to protect their rights and welfare.

Again, NUPENG is a pressure group union, it is not a manufacturer or producer or importer of petroleum products; NUPENG owns no petroleum refinery. NUPENG didn't go against selling refineries, they only insisted that the jobs, salaries, welfare, retirement benefits and payoff package of the staff be recognized and captured in the deal with the buyer of the refineries - outline the party that will give the commitment or settle the arrears and bill. The government and the buyers, then including DANGOTE, we're unwilling to discuss or capture the staff bills, remuneration, package or job, in the agreement.

If you claim NUPENG is being selfish, don't you think Dangote Refinery is being selfish too. The bottom line is that when you want to protect your interest, jobs, welfare, remuneration, benefits and prevent undue advantage from being taken against you, the other party and some stakeholders see you as being selfish.

Advice Dangote Refinery to find a way to navigate this unionism matter, it is not supposed to be an issue. It is the law in Nigeria and several countries around the world to allow unionism at labour.

youngsahito:
Oga, the refinery that Dangote built was not financed by him alone, CBN gabe him dollar discount and NNPC also have their share in it. Unionisim has been in existence for a long period of time and just because the man is capitalist, he will never accept anything unionisim be it NUPENG or others.
The reality now is that our useless govt has failed us leaving us to the mercy of the monopolist Dangote.
Nigerians don't learn just because of free delivery, everybody is singing praises of him.
Why can't he bring down the price of cement after all all the materials are all locally made. I weep for the ignorant Nigerians

Government didn't fail Nigerians on this matter, in fact the government has taken the right decision.

It is a free market, government is trying not to influence or control the market.

You should expect the market forces, which includes pressure groups like the NUPENG and PENGASSON, to act. That is what you are seeing so don't blame it on government.

Wallade:
Government didn't fail Nigerians on this matter, in fact the government has taken the right decision.

It is a free market, government is trying not to influence or control the market.

You should expect the market forces, which includes pressure groups like the NUPENG and PENGASSON, to act. That is what you are seeing so don't blame it on government.

I should not blame govt for not fixing the state owned refeneries after the balablu remove subsidy for more than two years now. Can you just sit down and listen to yourself. I just can't imagine our lazy youth always defending this govt that doesn't care about you and your family.

Psalmistproject:
The importing marketers cannot compete with this. Major marketers that imports operates depots so when dangote sells at prices far below what they're importing and also willing to drop it at your doorstep free of charge, you'll be forced to downsize your business. And they can't buy from dangote cos he's selling to retail filling stations

Maybe you don't know it but this part of your post is interesting because it proves the Marketers are one of the MAJOR problems the final CONSUMERS are facing.
This is no more about the Marketers welfare anymore but looking for a way to keep the products scarce for your personal benefits.

Wallade:
Op, I completely understand your position and I see what you are seeing.

The ultimate interest of Dangote Refinery is to monopolize the distribution network of fuel in Nigeria. That will give Dangote Refinery an unfair advantage over other sellers or refineries.

Dnt worry too much, other refiners are coming... BUA is 50% completed.. again the FG will privatize the naija, owned refineries.. ND in two years.. competition will come...

But as for the truckers welfare.. honestly I understand you, there should be a way the Unions can hold sway..let them gather and I believe two heads will make a good decision

There is NO danger anywhere

For decades, NUPENG and cohorts held Nigerians hostage in the dark days of subsidy

Nigerians CANNOT wait to see your backs

Game over!

Just as he did with sugar and cement.

Psalmistproject:
When this news broke on Nairaland front page. I simply made a cheap sarcastic remark about the risk and the greed involved but some people thought I was doing so because I hate dangote's progress.

Some were hopeful it will solve the problem with NUPENG.

I guess most people doesn't really understand this sector.

Let me start with NUPENG. NUPENG houses a union of truckers that are attached to big depots, filling station and maybe refinery as in dangote's case. All over the world truck operators belong to union and their union is among the strongest in the world. These union exist in about 150 countries and theirs also international union of truckers.

Why is this union important?

I once managed a petrol station in port Harcourt.

We had a very honest truck driver but for some reason, the owner of the filling station who is based in UK doesn't just trust any body. So once we finished selling each truck load of 40,000 liters within an average of 5 days we'll do both internal and external audit of the sales to ensure we were getting the value for our money.

So a times when he brings product and there's a dip measurements before he offloads in the underground tanks, it will either show the product is complete or short by 50L.

After sales on many cases we have extra 100L from sales showing the initial dip record from tanker the day it was bought doesn't show the correct measurements.

My boss wasn't having this. He will wail about how other filling station doesn't have such issues. In my defense I usually tell him let's wait and finish sales and check but he fills the extra we have should be more.

Meanwhile other stations around us usually report shortages at the end of sales.

Like play he decided he wasn't going to pay the driver. So for two months he owed him. When the driver protested vehemently, he sacked him.

I was furious infact I had to drop cos he accused me too of being a party to the non existent crime. I had to resign.

The saving grace of the driver was that he was a union member.

He reported the matter to the union.

The union tried reaching the owner, he was acting untouchable, they simply activated a sanction on the filling station. Circular went round, any truck from the filling station is not allowed in any depot across port Harcourt to load. If he uses a different truck they have agent that monitors the station for activities.

Their annoyance was how the man responded when they called him for settlement. The agreement was, They will supervisor the truck loading together with anybody the man wishes to send as escort. When they get to the station and takes a dip, if the dip gives higher than what it always gave they'll take up the matter with the driver and arrest him for theft but if it gives the usual figure the owner will pay him with one month up front.

The owner of the station after several attempts to snub them was frustrated as he wasn't allowed to load product again in the depots.

So the owner agreed. They loaded again they got to the station and took the dip under the supervision of the Union members, as usual the result was same. Meaning the Driver has been truthful all the while.

The union people now fined the filling station for maltreatment and disrespect.

The boss paid to the latter. In the end the driver went home happy and within two weeks secured another truck as a driver.

Now imagine what would have become of the driver.

The Union is responsible for due process in loading depots. If you remove them what you will get is chaos. There's a reason all over the world truckers belongs to union.
Their jobs are so important that they have to be protected.

Just like ASU, Doctors, Labour Union, NUPENG is very important. And they're the only union that doesn't get benefits from the government. They're on their own.

The problem with dangote is that he doesn't want his drivers to join the union. That's evil. He wants to remove their protection. That's why they striked. His drivers absolutely wants to join union.

So how did the union do it? They'll simply shut down all the depots to put pressure on dangote. If there is scarcity and hands starts pointing on dangote he will have to bend quickly. The union can block every entrance into his refinery and all other trucks that belongs to the union will not load product.

The Union exist for the truckers welfare if you remove their welfare the entire supply chain will collapse.

Now dangote wants to avoid buyers coming to his facility to load by bringing fictitious licensing and registration tactics and instead offering free delivery. This is to drive union out of his facility.

But that's not just the plot. If he goes along with it, these are the effects:

Market monopoly

Over reliant on dangote fuel

Long term set backs

Easy high increment of the product

Let me explain;

No body buying and loading from dangote refinery will be able to compete with those on free delivery. Cost will differ. This will make everyone want free delivery.

The importing marketers cannot compete with this. Major marketers that imports operates depots so when dangote sells at prices far below what they're importing and also willing to drop it at your doorstep free of charge, you'll be forced to downsize your business. And they can't buy from dangote cos he's selling to retail filling stations.

This will bring over reliant on the part of retailers on dangote.

On the long run when the wear and tears of evolving government system starts impacting, dangote can wake up one morning and shut down werey.. everybody go cry tire.

When he has beating down major competitors he will simply jack his price up as he pleases. No other competitor. Las las instead of dealing with multiple marketers and be safe cos if one doesn't have, another will we will be dealing with only one man. What we thought we thought we were going out from is where we finally arrived.

At last we are all at the mercy of dangote

The solution is to create a balanced trade system and protect every critical players involved including the final consumers.

That Dangote is like a curse to Nigeria.. he has destroyed sources of income of innocent Nigerians, still causing problems in every economic sector he ventures into.
He will destroy the Nigerian Petroleum sector eventually if allowed to get monopoly over every dam.n thing in the Petroleum sector. I won't say much cos it's like most Nigerians are just helpless on the Dangote matter.

Unions are legal, they form integral part of labour and employer interaction.. for one person to wake up one day and decide he wants to cancel the union should raise alarm that something terrible is cooking.

I've never heard Dangote saying his drivers should not join unions o.

RealityKings1:
Maybe you don't know it but this part of your post is interesting because it proves the Martkers are one of the MAJOR problems the final CONSUMERS are facing.
This is no more about the Marketers welfare anymore but looking for a way to keep the products scarce for your personal benefits.

For years marketers have been serving Nigerians faithfully. Yes sometimes there are fractions here and there but they have kept all our cars on the road.

The major marketers like Bulk strategic, oando etc operate both depots and sometimes franchise filing stations.

They import their products.
Dangote will not sell to them so they're forced to import.
The resources it takes to run a depot is quite insignificant compared to running a refinery.
Anybody cannot just establish a refinery.

The government can level the playing field by reintroducing a matching subsidy with the price of local producers.

It may not be a good thing for us not to purchase imported refined fuel anymore. I said may not.

The reason is that there's always a trade deal which has to with, value for value. The people that are buying our crude oil will expect us to buy their refined petroleum. If we don't they will deal with others.

You must offer something in return. It's more profitable for the government of Nigeria to sell off almost all it's product and acquire forex than giving to local refineries in Nigeria like dangote and the rest that will simply pay in local currency.

For instance if Nigerian government sells all it crude and got payments in naira, we're doomed! It's that simple.

That's why they're not particularly serious with developing our own local refineries.

My only problem with dangote is for him to play live and let live.

If he starts now to emasculate his staff by them not joining union, it's not a good sign.

I remember how he sacked thousands some years back and most of them were being owed he can't treat the staff under NUPENG like that.

Wallade:
When you want to comment on such issues, do some research so your comments can be informative and understandable.

In the passenger transportation industry in Nigeria, Chisco, GUO or GIG are actually running a monopolistic cartel. For the business owners in any industry, they are capitalists and monopoly has a huge advantage for them.

However, the qualities of free market, if and only if it exists, is free entry and exit and no monopoly. In reality, you should know that there is no market in the world that completely meets those qualities.

Again, NUPENG is not a petroleum products producer, marketer or business. NUPENG is a pressure group; association of staff of organizations that are operating in the petroleum industry in Nigeria. They ultimately protect the welfare, rights and remuneration of their members. Hence, they can't be in business of refinery of petroleum products.

Dangote conglomerates thrives under monopolies.

Dangote Refinery should not prevent staff from unionism. However good the intention of Dangote Refinery is for the staff, the refinery will still utilize the lack of unionism to take undue advantage of the staff.

Let's adopt the same transportation business in our conversation.
I believe that certain government policies must be put in place and enforced in a sector before Certain individuals can claim monopoly. No individual can monopolize a sector or resource without the backing of the government.
Speaking of CHISCO and GUO, was there ever a time that government said all commuters must use or travel with their buses?
Is it proper to say that the owner transportation company like GIG is trying to monopolize the transportation sector just because he added Logistics service and home delivery service to his transportation business?
Secondly, you can't be talking about free entry and exit and still be talking about monopoly.
You see? Your submission lacks proper cordinate, shallow, substandard and not applicable in a real business world.
So, it is either you don't understand what "monopoly" is all about or you don't understand what you posted.
Please I am not here to talk about textbook monopoly as you were taught in school.
Please answer the bolded question

Psalmistproject:
For years marketers have been serving Nigerians faithfully. Yes sometimes there are fractions here and there but they have kept all our cars on the road.

The major marketers like Bulk strategic, oando etc operate both depots and sometimes franchise filing stations.

They import their products.
Dangote will not sell to them so they're forced to import.
The resources it takes to run a depot is quite insignificant compared to running a refinery.
Anybody cannot just establish a refinery.

The government can level the playing field by reintroducing a matching subsidy with the price of local producers.

It may not be a good thing for us not to purchase imported refined fuel anymore. I said may not.

The reason is that there's always a trade deal which has to with, value for value. The people that are buying our crude oil will expect us to buy their refined petroleum. If we don't they will deal with others.

You must offer something in return. It's more profitable for the government of Nigeria to sell off almost all it's product and acquire forex than giving to local refineries in Nigeria like dangote and the rest that will simply pay in local currency.

For instance if Nigerian government sells all it crude and got payments in naira, we're doomed! It's that simple.

That's why they're not particularly serious with developing our own local refineries.

My only problem with dangote is for him to play live and let live.

If he starts now to emasculate his staff by them not joining union, it's not a good sign.

I remember how he sacked thousands some years back and most of them were being owed he can't treat the staff under NUPENG like that.

How sacking your workers a monopoly?

Jokay07:
How sacking your workers a monopoly?

I didn't say that. Go and read up all my take on the topic.

You have right to sack any staff but however it must follow due process. If it fails to meet due process that's evil.

Jokay07:
Let's adopt the same transportation business in our conversation.
I believe that certain government policies must be put in place and enforced in a sector before Certain individuals can claim monopoly. No individual can monopolize a sector or resource without the backing of the government.
Speaking of CHISCO and GUO, was there ever a time that government said all commuters must use or travel with their buses?
Is it proper to say that the owner transportation company like GIG is trying to monopolize the transportation sector just because he added Logistics service and home delivery service to his transportation business?
Secondly, you can't be talking about free entry and exit and still be talking about monopoly.
You see? Your submission lacks proper cordinate, shallow, substandard and not applicable in a real business world.
So, it is either you don't understand what "monopoly" is all about or you don't understand what you posted.
Please I am not here to talk about textbook monopoly as you were taught in school.
Please answer the bolded question

You don't want to talk about text book monopoly as I was taught in school so where did you get your own understanding of monopoly? Is it from your imagination?

GIG and GUO and other leading transport companies can't properly be compared to Dangote Refinery. Dangote Refinery refines petroleum products, it is a major buyer of Crude Oil operating in Nigeria. It also now trucks the petroleum products from it's loading bays at it's depot to the various buyers. It has a wholesale arrangement with RANO Oil and a few other retailers. Currently there is no organization operating in Nigeria with such capacity.

That my friend or foe is a big monopoly at play. Dangote Refinery is currently operating a monopoly and when the new refineries come on board, we will have a monopolistic situation in nigerian downstream petroleum products industry. In many of Dangote's businesses today Dangote is in a monopolistic situation in those industries.

It may interest you to study the features of a monopoly market and tell me if it doesn't depict what you see with Dangote Refinery:

1. Single Major Seller: A monopoly market is characterized by a single major producer controlling almost the entire supply of the product or service.

2. Price Maker: The monopolist has the power to set prices independently, often leading to higher prices and reduced consumer surplus.

3. Lack of Close Substitutes: Monopoly products typically have no close substitutes, giving the monopolist significant pricing power.

5. Profit Maximization: Monopolies aim to maximize profits by setting prices where marginal revenue equals marginal cost, often resulting in higher prices and lower output levels compared to competitive markets.

I will advice you go back to school and study economics at large or at least, study monopoly. This will help you to improve on communication, deepen your understanding of economics and business environment and make your position more understandable.

You people will cry Taya ...go back to your sponsors and tell them we must end fuel importation

I agree with most of what you said there because am also in the industry. My own is; the man dangote should do his things and allow others do their thing. Nobody is in any competition with him! And he must play by the rule books. You can't stop your truckers from joining a union like nupeng. Can he try that nonsense in other countries?

The guy will just wake up and create some imaginary competition in his head. Everytime you are fighting competition. Like who is competing with you

SarkinYarki:
You people will cry Taya ...go back to your sponsors and tell them we must end fuel importation

All over the world fuel are imported. Even Saudi Arabia imports fuel! USA imports, Russia imports!

One man CAN'T supply what a large country like Nigeria consume unless we want disaster. Can his refinery supply every nuke and cranny of this country even for a week! The oil industry is not like the other businesses the man is into. The oil industry is big and needs many hands for it to run successfully.


And Dangote can't monopolize the industry as i know he wish to do so even if the government gives him all the support. Is impossible!

Wallade:
You don't want to talk about text book monopoly as I was taught in school so where did you get your own understanding of monopoly? Is it from your imagination?

GIG and GUO and other leading transport companies can't properly be compared to Dangote Refinery. Dangote Refinery refines petroleum products, it is a major buyer of Crude Oil operating in Nigeria. It also now trucks the petroleum products from it's loading bays at it's depot to the various buyers. It has a wholesale arrangement with RANO Oil and a few other retailers. Currently there is no organization operating in Nigeria with such capacity.

That my friend or foe is a big monopoly at play. Dangote Refinery is currently operating a monopoly and when the new refineries come on board, we will have a monopolistic situation in nigerian downstream petroleum products industry. In many of Dangote's businesses today Dangote is in a monopolistic situation in those industries.

It may interest you to study the features of a monopoly market and tell me if it doesn't depict what you see with Dangote Refinery:

1. Single Major Seller: A monopoly market is characterized by a single major producer controlling almost the entire supply of the product or service.

2. Price Maker: The monopolist has the power to set prices independently, often leading to higher prices and reduced consumer surplus.

3. Lack of Close Substitutes: Monopoly products typically have no close substitutes, giving the monopolist significant pricing power.

5. Profit Maximization: Monopolies aim to maximize profits by setting prices where marginal revenue equals marginal cost, often resulting in higher prices and lower output levels compared to competitive markets.

I will advice you go back to school and study economics at large or at least, study monopoly. This will help you to improve on communication, deepen your understanding of economics and business environment and make your position more understandable.

Lolz. Go back to school?
I think I am enjoying the conversation now. I will make my response short.
Ok. Let's go back to economics textbook.
So, if I were your student. Help me make sense of those questions below.

Firstly, is the downstream sector deregulated?

Secondly: what's the meaning of "free entry and exit"
Thirdly, What's the function of "monopoly" in a deregulated upstream sector where free entry and exit exist?

Please provide answers to the following questions.

Psalmistproject:
When this news broke on Nairaland front page. I simply made a cheap sarcastic remark about the risk and the greed involved but some people thought I was doing so because I hate dangote's progress.

Some were hopeful it will solve the problem with NUPENG.

I guess most people doesn't really understand this sector.

Let me start with NUPENG. NUPENG houses a union of truckers that are attached to big depots, filling station and maybe refinery as in dangote's case. All over the world truck operators belong to union and their union is among the strongest in the world. These union exist in about 150 countries and theirs also international union of truckers.

Why is this union important?

I once managed a petrol station in port Harcourt.

We had a very honest truck driver but for some reason, the owner of the filling station who is based in UK doesn't just trust any body. So once we finished selling each truck load of 40,000 liters within an average of 5 days we'll do both internal and external audit of the sales to ensure we were getting the value for our money.

So a times when he brings product and there's a dip measurements before he offloads in the underground tanks, it will either show the product is complete or short by 50L.

After sales on many cases we have extra 100L from sales showing the initial dip record from tanker the day it was bought doesn't show the correct measurements.

My boss wasn't having this. He will wail about how other filling station doesn't have such issues. In my defense I usually tell him let's wait and finish sales and check but he fills the extra we have should be more.

Meanwhile other stations around us usually report shortages at the end of sales.

Like play he decided he wasn't going to pay the driver. So for two months he owed him. When the driver protested vehemently, he sacked him.

I was furious infact I had to drop cos he accused me too of being a party to the non existent crime. I had to resign.

The saving grace of the driver was that he was a union member.

He reported the matter to the union.

The union tried reaching the owner, he was acting untouchable, they simply activated a sanction on the filling station. Circular went round, any truck from the filling station is not allowed in any depot across port Harcourt to load. If he uses a different truck they have agent that monitors the station for activities.

Their annoyance was how the man responded when they called him for settlement. The agreement was, They will supervisor the truck loading together with anybody the man wishes to send as escort. When they get to the station and takes a dip, if the dip gives higher than what it always gave they'll take up the matter with the driver and arrest him for theft but if it gives the usual figure the owner will pay him with one month up front.

The owner of the station after several attempts to snub them was frustrated as he wasn't allowed to load product again in the depots.

So the owner agreed. They loaded again they got to the station and took the dip under the supervision of the Union members, as usual the result was same. Meaning the Driver has been truthful all the while.

The union people now fined the filling station for maltreatment and disrespect.

The boss paid to the latter. In the end the driver went home happy and within two weeks secured another truck as a driver.

Now imagine what would have become of the driver.

The Union is responsible for due process in loading depots. If you remove them what you will get is chaos. There's a reason all over the world truckers belongs to union.
Their jobs are so important that they have to be protected.

Just like ASU, Doctors, Labour Union, NUPENG is very important. And they're the only union that doesn't get benefits from the government. They're on their own.

The problem with dangote is that he doesn't want his drivers to join the union. That's evil. He wants to remove their protection. That's why they striked. His drivers absolutely wants to join union.

So how did the union do it? They'll simply shut down all the depots to put pressure on dangote. If there is scarcity and hands starts pointing on dangote he will have to bend quickly. The union can block every entrance into his refinery and all other trucks that belongs to the union will not load product.

The Union exist for the truckers welfare if you remove their welfare the entire supply chain will collapse.

Now dangote wants to avoid buyers coming to his facility to load by bringing fictitious licensing and registration tactics and instead offering free delivery. This is to drive union out of his facility.

But that's not just the plot. If he goes along with it, these are the effects:

Market monopoly

Over reliant on dangote fuel

Long term set backs

Easy high increment of the product

Let me explain;

No body buying and loading from dangote refinery will be able to compete with those on free delivery. Cost will differ. This will make everyone want free delivery.

The importing marketers cannot compete with this. Major marketers that imports operates depots so when dangote sells at prices far below what they're importing and also willing to drop it at your doorstep free of charge, you'll be forced to downsize your business. And they can't buy from dangote cos he's selling to retail filling stations.

This will bring over reliant on the part of retailers on dangote.

On the long run when the wear and tears of evolving government system starts impacting, dangote can wake up one morning and shut down werey.. everybody go cry tire.

When he has beating down major competitors he will simply jack his price up as he pleases. No other competitor. Las las instead of dealing with multiple marketers and be safe cos if one doesn't have, another will we will be dealing with only one man. What we thought we thought we were going out from is where we finally arrived.

At last we are all at the mercy of dangote

The solution is to create a balanced trade system and protect every critical players involved including the final consumers.

For this rubbish your wrote we pay extra 1 naira per litre as loading fees to some lazy rent seekers called unions .
You skip that part
The union want to be Milking 40m daily x 30 for settling dispute .this sum is burned by consumer .
They don't own any truck or depot but making more money than investor.
Union time has passed

Psalmistproject:
For years marketers have been serving Nigerians faithfully. Yes sometimes there are fractions here and there but they have kept all our cars on the road.

The major marketers like Bulk strategic, oando etc operate both depots and sometimes franchise filing stations.

They import their products.
Dangote will not sell to them so they're forced to import.
The resources it takes to run a depot is quite insignificant compared to running a refinery.
Anybody cannot just establish a refinery.

The government can level the playing field by reintroducing a matching subsidy with the price of local producers.

It may not be a good thing for us not to purchase imported refined fuel anymore. I said may not.

The reason is that there's always a trade deal which has to with, value for value. The people that are buying our crude oil will expect us to buy their refined petroleum. If we don't they will deal with others.

You must offer something in return. It's more profitable for the government of Nigeria to sell off almost all it's product and acquire forex than giving to local refineries in Nigeria like dangote and the rest that will simply pay in local currency.

For instance if Nigerian government sells all it crude and got payments in naira, we're doomed! It's that simple.

That's why they're not particularly serious with developing our own local refineries.

My only problem with dangote is for him to play live and let live.

If he starts now to emasculate his staff by them not joining union, it's not a good sign.

I remember how he sacked thousands some years back and most of them were being owed he can't treat the staff under NUPENG like that.

Oga, Dangote is on record saying his drivers earn four times our minimum wage and are qualified for housing loan after 5 years. If any driver is not satisfied with the terms of there employment,they can quit

Jokay07:
Lolz. Go back to school?
I think I am enjoying the conversation now. I will make my response short.
Ok. Let's go back to economics textbook.
So, if I were your student. Help me make sense of those questions below.

Firstly, is the downstream sector deregulated?

Secondly: what's the meaning of "free entry and exit"
Thirdly, What's the function of "monopoly" in a deregulated upstream sector where free entry and exit exist?

Please provide answers to the following questions.

I will gladly provide answers for you once you provide answers to the questions I asked you earlier.

It will be an interesting conversation. Can't wait.

Wallade:
I will gladly provide answers for you once you provide answers to the questions I asked you earlier.

It will be an interesting conversation. Can't wait.

Ok. Sorry, I didn't see any question. You mind reposting it please

Jokay07:
Ok. Sorry, I didn't see any question. You mind reposting it please

Backtrack into our conversations. You will see the questions.

Educationalserv:
For this rubbish your wrote we pay extra 1 naira per litre as loading fees to some lazy rent seekers called unions .
You skip that part
The union want to be Milking 40m daily x 30 for settling dispute .this sum is burned by consumer .
They don't own any truck or depot but making more money than investor.
Union time has passed

You remove union you'll simply get government tax force replacing them and collecting more than what you feel you're loosing.
Of course no one can organize such a strong powerful union without a strong financial base involved.
It's better that the ogas pay from their own pocket. Adding it to the cost selling to consumers has little impact. I managed a filling station, part of the game is to determine ways you lower overall cost of purchase and cost of running the business, removing that 1 naira is simple. That's why some filing stations sell below others.
Relax the union Levy is played down by market competition. You wouldn't want to have people avoiding your station because you can't spare 40k per truck but makes more than 1 million naira in profit every month after total expense or running cost. I'm telling you as someone that have ran one of the most strategically positioned and top gas station here in port Harcourt.